Back in 2005, when metal prices where about the same as they are now, KZL had $64 million in revenue. 2006 it went to $116 million, and the rose again in 2007 and 2008 before the GFC hit big time. Profits went from $14 million to $51 million and then $131 million.
I understand it is not the same company but it gives you an idea what can be done if metal prices stay at these levels or rise further.
Yep, 10% of that profit added to the extremely undervalued tin proposition and you might be able to see why I like these a whole lot more.
Unfortunately, due to the new arrangements and the many additional variables, it is difficult to get an exact figure of their worth. Conservatively, I was thinking of a share price of around 50 cents before the offer, and that was given the 50% sale to Snow Peak. However, now I'm thinking that is hugely undervalued.
A reiterate that what this deal has done has removed the risks, changing CSD from a spec into a producer. The risks of delayed construction, cost blow outs, financial uncertainty, etc, have almost all but disappeared.
For those long-term holders, 2013 will be the year.
Have a very safe and enjoyable New Year, and crack that bubbly knowing that we are holding a real gem, and in less than 31 days it will be official.
;-)
CSD Price at posting:
6.8¢ Sentiment: LT Buy Disclosure: Held
